Abstract:
Customer satisfaction, trust and loyalty have been extensively researched, but the
continuous changing of customer needs and the changing banking regulatory
environment necessitates a correspondingly continuous evaluation of these construct.
This study analysed the impact that customer satisfaction has on customer loyalty. In
addition, the study investigated the mediating role of trust in the relationship between
customer satisfaction and customer loyalty. The study was conducted on 825 useable
responses which represented 82.5% of questionnaires distributed. Explanatory
research design was used and Stata version 13 and IBM Statistical Package for Social
Sciences version 20 were the software used in data analysis. The study used Structural
Equation Model for data analysis to explored direct, indirect and total effect
relationships. Confirmatory Factor Analysis was used for data purification. The study
concludes that customer satisfaction has positive and significant relationship with
customer loyalty in the banking sector. The study also found that customer satisfaction
positively and significantly affects customer trust in the banking sector. In addition,
customer trust also affects customer loyalty positively and significantly. The study also
revealed that customer trust partially mediates between customer satisfaction and
customer loyalty. However, customer trust does not mediate between specific
dimensions of customer satisfaction and customer loyalty. This means that researchers
and managers of banks should find innovative ways to build service performance and
aligned their services to as a way to increase customer satisfaction to promote
customer loyalty. The customer trust partial mediation role and customer trust failure
to mediate customer satisfaction specific dimensions with customer loyalty need future
research.
